Y2K a big business
If there is a new national pastime to replace baseball – and you discount the current frenzy surrounding the release of the new Star Wars movie – it has to be fretting over the year 2000. Y2K has become a fixture in the national consciousness and an industry unto itself, responsible, experts estimate, for more than $2 billion is revenue since January 1, 1998.
Who is making money off of Y2K? It isn’t big business. Major corporations are spending millions to ward off the Millennium Bug. MCI Worldcom, for example, has budgeted $574 million for Y2K fixes, and has spent $212 million since 1997.
Those making money off of the phenomenon are the entrepenuers. On a small scale it is the “stockpile specialists” and survivalists, pushing everything from compost toilets to plastic 50-gallon water tanks.
But there are also several data companies which are setting out into Y2K waters. One of the most prominent is Weiss Ratings Inc., a ratings company based in Palm Beach Gardens, Fla., which sells reports to potential investors and regular consumers on the health and effectiveness of any corporation.
In the past, Weiss has made a name for itself by providing insurance company and health care organization safety ratings. For a $49 fee, an individual or group can requisition Weiss to rate a particular company, receiving a report as to the company’s financial stability, ranking among competitors, etc.
Now, Weiss is in the Y2K business. Controversy has ensued.
In a recent press release, Weiss rated some of the nation’s largest corporations as to their Y2K readiness, and started a small riot when they ranked 50 of them “below average.”
Some high-profile companies, such as Intel and Conagra, were even given a rating of “low” – the Y2K readiness kiss of death.
But further examination of Weiss’ findings just go to show what an inexact science this Y2K thing really is.
A visit to Intel’s Web site, for example, lists the computer-chip company’s Y2K preparedness at “99 percent compliance in priority manufacturing systems,” and “85 percent of priority non-manufacturing systems.”
In the corporate sector, this would be an excellent rating. And Intel is indeed acknowledged to be a leader in Y2K preparedness in the computer industry.
“Why wouldn’t we be? We’re in the computer business,” said Intel spokesperson Bill Calder. “(The Weiss Ratings findings) are unbelievable. It appears to me that Weiss has done very little core research.”
The walls have been shaking in corporate board rooms all across the nation since the Weiss Ratings report was made public last week. The title of the report read: “America’s Largest Companies Among Y2K Laggards,” and targets included such heavy hitters as Wal Mart, Sprint, RJR Nabisco, PG&E and Pacific Bell parent company SBC Communications.
“It doesn’t take a genius to figure out what Weiss has done,” said Wal Mart spokesperson Melissa Brown. “They’re just basically looking at the Y2K budgets. If a company has not spent the majority of its budget, then Weiss gives it a low rating.
“We completely disagree with this method rating. It’s an inaccurate and superficial interpretation.”
Intel has a Y2K budget of $175 million, and has spent (as of Feb. 1, 1999), $42 million of that, according to its filings with the SEC. Weiss gave the company a rating of “low.”
“Weiss is apparently assuming that the spending rate correlates exactly with our Y2K progress,” Calder said. “The assumption is that we won’t be able to spend enough by the end of the year to use up our entire budget.
“In fact, the budgeting does not occur in a linear fashion. It peaks in mid-1999, the contours into the year 2000, and we’re even spending beyond that. Weiss has no idea what’s happening.”
Weiss public relations consultant Elizabeth Grace defended the company’s methods, and claimed that more research was conducted other than simply leafing through the SEC Y2K budget filings.
“That is our main criteria, but we also have other research,” she said. “We are the only ratings company that does not take compensation from the companies it rates. And the U.S. General Accounting Office has rated Weiss as the most accurate service.”
Grace would not specify the “other research” Weiss does, instead offering to fax the details. As of press time for this article, no fax was forthcoming.
“A simple phone call to us would have cleared up everything,” Calder said. “We have data we can substantiate. This seems to be beyond (Weiss).”
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